Regaining international market confidence, especially in Asia, is Canada’s next challenge once trade resumes for live cattle and beef.
A lone case of bovine spongiform encephalopathy has cost the Canadian beef industry nearly $1.2 billion in lost sales, lost jobs and devalued inventory, said Ted Haney, executive vice-president of the Canada Beef Export Federation.
Exports losses alone total $260 million since May 20.
On June 12 the Canadian Food Inspection Agency officially requested that the United States Department of Agriculture lift the export ban, but no decision had been made as of press time on June 16.
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“The timing of the decision is in the hands of the regulators and the politicians in the United States,” Haney said.
“We still feel confident science is still the primary determining factor.”
A complication is that Japan and South Korea insist U.S. processing plants must segregate Canadian beef rather than commingling it with potential export beef headed for their countries.
On June 16, U.S. beef market watchers said Japan’s reservations might influence the speed at which America accepts Canadian beef.
“The only way we can do that right now is by keeping the (Canadian) border shut, because we simply don’t have the tracking infrastructure in place to guarantee that if the border’s open,” Ann Barnhardt, an analyst at HedgersEdge.com told Reuters News Agency.
“The Asian Rim is such a huge export market for us, it’s of far more value than our relationship with Canada,” she said. “So we’re going to do whatever is necessary to stay in the good graces of the Japanese and South Koreans.”
Mexico has told Canada it is willing to accept Canadian beef once the scientific community says there is no further BSE risk.
Japan may take more convincing.
“Japan is the market where we have more to do,” Haney said.
“It is the nature of the society and the market. We will have to do more there than any other market.”
Japanese officials were to arrive this week to examine Canada’s status and health investigation. Mexico’s chief veterinarian is expected next week to inspect technical information.
A three point strategy is planned for Japan: a national advertising campaign talking about Canadian procedures; point of purchase material addressing potential consumer questions; and food safety seminars. These will explain the investigation process and how Canada keeps itself BSE free.
Market watcher Steve Kay, editor of the American publication Cattle Buyers’ Weekly, said some countries may readily open their markets while others may not.
Since 1993, Japan has refused beef from any country that has had BSE.
It will demand irrefutable proof Canada is disease free.
“It won’t resolve the trade between Canada and Japan unless Canada can convince Japan that it is perfectly safe,” Kay said.
While no one knows when the border could reopen, Kay suggested the Americans could hold back until the Japanese are convinced there is no risk.
“They must satisfy the Japanese before there is any reopening of the border,” he said.
Failure to satisfy them could lead to the U.S. being blocked from exporting to Japan or South Korea at a loss of up to $3 billion US this year.
Once trade resumes, the rebuilding in Canada starts. Processors could be back to normal production in 72 hours, but other sectors could take a month or more to return to normal.
In addition, new regulations may stipulate which products are acceptable for human food.
“These are questions that are being studied by CFIA and Health Canada today,” Haney said.
International guidelines specify certain products as at-risk material. This could include material from the spinal column area, but hearts, livers, kidneys, tongues with no tonsils and tripe are still acceptable.
